The marginal propensity to save is given by
A) the change in saving divided by the change in consumption.
B) saving divided by the change in disposable personal income.
C) saving divided by disposable income.
D) the change in saving divided by the change in disposable personal income.

Question

Quizplus · Accepted Answer

The marginal propensity to save (MPS) is the change in saving divided by the change in disposable personal income. This means that for every additional dollar of disposable income, how much of that will be saved. Therefore, the correct option is D, which states that MPS is given by the change in saving divided by the change in disposable personal income.

The Marginal Propensity to Save Is Given by